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2016 Supreme(Del) 2695
IN THE HIGH COURT OF DELHI AT NEW DELHI
S. RAVINDRA BHAT & DEEPA SHARMA, JJ.
RAJESH KHANNA – Appellant
Versus
NATIONAL AGRICULTURAL CO-OPERATIVE MARKETING FEDERATION OF INDIA LIMITED – Respondent
F.A.O. (OS) Nos. 93 & 317 of 2010
Decided On : 01-08-2016
For the Appellant :Mr. Divyanshu Goyal with Ms. Swati Jain, Advocates.
For the Respondent:Mr. A.K. Thakur, Mr. R.K. Mishra and Ms. Rajeshwari Jha, Advocates.
Headnote:
ARBITRATION - AWARD - CHALLENGING - GROUNDS - INTEREST - MODIFICATION OF SETTLEMENT - LIMITATION - [SECTION 34 OF ARBITRATION AND CONCILIATION ACT, 1996].
Fact of the Case:
Appellants challenged the order of a learned Single Judge dated 04.12.2009 (impugned order) which rejected their objections under Section 34 of Arbitration and Conciliation Act (OMP No. 693/2009 and OMP No. 694/2009) to the award dated 24.04.2009.
Finding of the Court:
The court held that the award was not against public policy or patently illegal and that the appellants had failed to show that the award was contrary to the terms of the settlement. The court also held that the appellants' objections were barred by limitation.
Issues: Whether the award was against public policy or patently illegal.
Ratio Decidendi: The court held that the award was not against public policy or patently illegal because it was based on the terms of the settlement between the parties and the subsequent developments pursuant to the settlement. The court also held that the appellants' objections were barred by limitation because they were filed beyond the period prescribed under Section 34(3) of the Arbitration and Conciliation Act.
Final Decision: The court dismissed the appeals with no order as to costs.
DEEPA SHARMA, J.
1. The appellants challenge the order of a learned Single Judge dated 04.12.2009 (impugned order) which rejected their objections under Section 34 of Arbitration and Conciliation Act (OMP No. 693/2009 and OMP No. 694/2009) to the award dated 24.04.2009.
2. The brief facts of the case are that the appellants and National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED), (a Cooperative Society duly registered under the Multiple State Cooperative Societies Act) entered into agreements (hereafter “MOUs”) pursuant to which Rs. 75 crores were advanced by the NAFED to M/s Rital Impex and Rs. 10 crores, to M/s Kripa Overseas. Certain Disputes arose between the parties under both the MOU’s.
3. NAFED filed an application under Section 9 (OMP No. 291/2006) and by order dated 06.07.2006 immovable properties were attached. When NAFED appointed the arbitrator under the MOU, M/s Rital Impex filed an application, (AA No. 271/2006, under Section 11) in the court for appointment of an Arbitrator. In those proceedings, Justice Devender Gupta, a retired Judge of this Court, was appointed as an Arbitrator to adjudicate upon the dispute between the parties. NAFED claimed Rs. 50 crores; M/s Rital Impex counter claimed Rs. 65 crores towards loss and damages suffered by it.
4. Another application, AA No. 68/2007 was filed by NAFED against Kripa overseas and by order dated 20.03.2007, Mr. Justice D.P. Wadhwa (Retd.) was appointed as a sole Arbitrator. NAFED complained to the police, which led to registration of FIR Nos. 474/2006 dated 26.08.2006 at Police Station Srinivaspuri for offences punishable under Sections 406, 420 read with Section 121-B of IPC against M/s Kripa Overseas, Sandeep Khanna and others and registration of FIR No. 223/2007 dated 18.05.2007 with Police Station Srinivaspuri against Sh. Rajesh Khanna, proprietor of Rital Impex Limited for offences punishable under Sections 406, 420, 467, 468, 471 read with Section 120-B of the Indian Penal Code.
5. Negotiations ensued between the parties and all three, NAFED, M/s Rital Impex and M/s Kripa Overseas entered into a settlement dated 03.05.2007. Under the terms of settlement, besides Sh. Rajesh Khanna and Sh. Sandeep Khanna, proprietors of M/s Rital Impex and M/s Kripa Overseas, other family members and promoters/Directors of Rital Impex Limited, who owned/possessed the properties, also acknowledged and admitted and ratified the terms of settlement and agreed to be bound by the same. The settlement was produced before the Court of Sh. Vinod Kumar, Additional Sessions Judge, wherein the bail application in FIR No. 474/2006 was pending. The parties made a statement before the Court on 14.05.2007 acknowledging the settlement. Since the other family members of these two proprietorship concerns were not the parties of the MOU, they moved CM No. 5746/2007 for impleadment in OMP No. 291/2006. The learned single judge, by order dated 16.05.2007 allowed the impleadment of those individuals as parties and in the same order on another application CM No. 5743/2007 (for taking on record the settlement) observed that in view of the settlement between the parties, the proceedings before the Arbitrator had become redundant. The said application under Section 11 was disposed of with liberty to move appropriate applications seeking implementation of the settlement. The Arbitrator was also informed of the said settlement and in view of the settlement and order of the Single judge dated 16.05.2007, the arbitral proceedings were adjourned sine die with liberty to the parties to apply for its revival.
6. Meanwhile, the Writ Petition (Crl) No. 461/2007 and Writ Petition (Crl) No. 785/2007 for quashing of FIRs were taken up for hearing on 02.04.2007. These proceedings were opposed by NAFED alleging failure on the part of the two concerns and their proprietors to honor the commitment in the settlement. During those proceedings, the appellants agreed that the liability could
